This paper examines how "The Wealth of Nations" is undoubtedly a great work, even though Adam Smith's theory of value and
distribution represents one of his lesser contributions to economic thought. It discusses how Smith's riddle of the diamond water paradox
clearly describes the reasons for his support of an objective theory where he failed to grasp the concept of marginal utility. It also shows that while some commentators argue that Smith purports a cost-of-
production theory for value rather than a labour theory, his emphasis is clearly on labour as he measures the cost-of-production in terms of labour.